FMG share price in focus
Fortescue Ltd, founded in 2003 and headquartered in Perth, is a leading iron ore production and exploration company with assets located in the Pilbara region of Western Australia.
The company primarily focuses on iron ore production, shipping over 190 million tonnes annually. In addition to its iron ore operations, Fortescue has been expanding its exploration efforts across Australia, Argentina, Chile, Brazil, and Kazakhstan, targeting key materials such as copper, rare earths, and lithium.
This expansion aligns with the company’s long-term strategy to capitalise on the growing demand for these resources, driven by the global shift to renewable energy. Fortescue aims to meet the increasing need for copper, lithium, and other rare earths in the coming years.
MIN shares
Mineral Resources Limited is a diversified Australian mining company focused on lithium and iron ore extraction across Western Australia.
MIN also provides mining and engineering services for external clients through its wholly-owned subsidiary, CSI Mining Services (CSI). Through CSI, Mineral Resources can provide capital infrastructure and operational expertise to clients across WA, Queensland, and the Northern Territory.
MIN aims to set itself apart from its competitors by maintaining in-house engineering and construction capability that grants full control and flexibility during product development.
FMG & MIN share price valuation
We would consider FMG to be a ‘mature’ or ‘blue-chip’ business, so some of the metrics that could be worth considering include the debt/equity ratio, average yield, and return on equity, or ROE. These measures give us a sense of the company’s debt levels, their ability to generate returns from their assets, and their ability to consistently return profits to shareholders.
For FY24, Fortescue Ltd reported a debt/equity ratio of 27.6%, meaning the company has more equity than debt.
Over the last 5 years, FMG has delivered an average dividend yield of 10.5% per year. This is important to note if you’re looking for income from your investments.
Finally, in FY24, FMG reported an ROE of 30.2%. For a mature business you generally want to see an ROE of more than 10%, so FMG clears this hurdle.
Mineral Resources Ltd reported a debt/equity ratio of 148.9% in FY24, meaning the company is leveraged.
As for dividends, since 2019 MIN has achieved an average dividend yield of 2.4% per year, and in FY24 reported an ROE of 3.2%
Keep in mind that these are only a small selection of metrics. We don’t have enough information to value the business or make an investment decision. To learn more about valuation, check out one of our free online investing courses.
